Here’s What Delta’s CEO Has To Say About Trump’s Victory

Filed Under: Delta, Videos

It’s always interesting to hear what airline executives are thinking, as it gives us a good idea of what we can expect going forward. Delta’s CEO, Ed Bastian, was on CNBC yesterday, and had some interesting things to say following the Donald Trump victory in the U.S., as it pertains to the Gulf carriers, airfare forecasts, etc.

A lot of what he says simply reflects what has happened to the markets over the past several weeks, but there’s also some airline specific stuff in there. I’d highly recommend checking out this four minute clip if you have the time:

The highlights (I realize much of this obvious, but…)?

  • There’s an increase in consumer confidence following the election, and optimism that they’ll start to get things done in Washington
  • Fares are starting to stabilize, and Delta is expecting that first quarter unit revenue will be flat to up to 2%, after declining fares the past couple of years
  • The U.S. carriers have of course been battling the Gulf carriers, and Bastian is optimistic this will be addressed under Trump — “our president-elect ran on a platform of protecting U.S. jobs and enforcing U.S. trade treaties, and we don’t think there has been a more important industry that has been violated with respect to trade treaties and the potential loss of jobs than the airline industry, so we look forward to having the opportunity to make our case”
  • Consumer confidence is much stronger than they were seeing through the summer, and Bastian thinks improvements in yields are industry-wide, and not Delta specific

Many may remember that Delta’s former CEO, Richard Anderson, wrote an op-ed endorsing Hillary Clinton, which made many points about what her presidency would mean for the airline industry.

Clearly a large part of the increased confidence is simply the election being over, and the fact that companies now have a better idea of what they can expect.

Anyway, I’m not trying to be terribly political here. Perhaps the biggest takeaway is that we’ve seen airfare on the decline for the past two years, and Delta’s CEO is expecting that trend to reverse in the first quarter, though not drastically. Between increased fuel and labor costs, they’ll certainly need fares to increase in order to deliver decent results.

  1. Translation: We’re going to get protectionism we so badly need since we can’t compete when it comes to our product!

  2. You’re going to get bashed now by the same crowd who support racist hate crimes like the kidnap-torture of Austin Hillbourn in Chicago.

    Anything remotely resembling an adult, calm take on the fact (yes, fact) that Trump will now be President and that markets have responded extraordinarily well to that fact, is met with childish ad hominem attacks.

    Consider this: Trump is benefitting industry because he ran on a platform with policy proposals (like them or not). Clinton ran on a platform of turning Americans against each other and her rabid supporters are eating it up; egging on more of their violence, which only comes from one side.

  3. ” Perhaps the biggest takeaway is that we’ve seen airfare on the decline for the past two years,..” Really? Maybe for people living on the East and West coasts. If you live outside that area airfare has never been so high. How about paying $1200 to fly from MSP to OMA? How about paying over $2k for any flight from MSP to Europe?

  4. You can’t call it protectionism. The gulf carriers are state subsidized which automatically makes it unfair competition. A non-subsidized company can never compete with a subsidized company…ever…in any industry…period.

  5. The fact that Americans took their country back from the liberal elites who talked a big game but delivered little shouldn’t really impact air travel. If the economy strengthens then air fares will rise, which works out because then travelers will have more money to spend anyway.

  6. I’m far from a Trump supporter, but c’mon people…….a CEO can make a statement that government actions/policies will have an impact on their business without having a political circus?

    Are we going to carry on today about Delta like everyone did yesterday about LL Bean?

    If Trump and his policies help the economy and put more money into consumer’s and business’ pockets then that will be good for Delta. If Trump and his policies cause another recession, Delta will suffer.

    I have my belief on what a Trump presidency will do to our country, but I hope I am wrong. I hope even the most Liberal person out there feels the same way.

  7. @Lucky – The last thing I want to think about when reading your blog is politics. I would advise you remove this article. The comments are toxic and a turn off.

  8. @Lucky: 100% agree with Chris’ comment above. I come everyday to your blog to read about travel. I understand you want to broaden the articles in your blog but it has become very political lately with articles that trigger readers to express their political views witch is not the reason your blog is known for. Please try to focus on travel reports, airline and hotel reviews. If you really want to get into more controversial articles then maybe it is time to hire someone to moderate the responses otherwise your blog is going to become a nightmare.

  9. @Lucky

    Total Click Bate!!!

    Nothing like bringing up the most UNPOPULAR US President to take office and saying something positive about him! Come on, that is throwing red meat to hungry tigers!

  10. It’s so so sad to realize that the very best blogger out there, Lucky, who happens to be a gay man has so many prolific commenters/ followers that are now showing their Conservative scumbag side.

    Santastico, the coward guy etc etc… How do you think Pence’s position will be for the country and our freedom? A man who advocates not doing business with gays, and conversion therapy to “correct” them. What do you think of Trump asking “if we have nukes, why can’t we use them?” Not once, but 3 times in one security meeting means for the world? This blog is about world travel, right?

    You narcissistic supporters might love your God and Guns and all that, but do you care about innocent lives, babies, women and children that happen to be in another country, another color, another faith? Actually do you care about your own American compatriots who are Mexican or Muslim or gay, your own troops who will be deployed for the next BS war etc?

    Those that support Trump have no compassion, no soul, no empathy, no decency or respect for human life. You literally sicken me to my core.

  11. For just a very simple travel industry based post, Trump Derangement Syndrome rears it’s ugly head. Now waiting for someone to comment that the very mention of DJT is a microagression. (sic)

    Yes please, make this blog a ‘safe space” for Liberals, who are still trying to hide their heads in the sand. 😉

  12. @Rob,

    It is protectionism. It is irrelevant if they are subsidized or not. If someone wants to offer me a product for less than a competitor, I’m fine with that. It is still up to me to purchase it or the competitor’s. Protectionism is taking that choice away from me, through coercion, and violence, no difference than what a gang does.

    The only fair trade is the voluntary one: there’s nothing fair in using violence to remove a choice from me.

    Rob, we talked about this before, and to me it is a pretty simple thing: just let me choose.

  13. @Andrew: Would you mind to share why you are mentioning my name in your post? All I said is that I come here to read about travel and not politics. What is wrong with that?

  14. @Fran, you will only pay less while there are still non-subsidized competitors left alive to vanquish. Once a subsidized competitor puts everyone else out of business guess how good your choices will be? This isn’t really a point that any economist actually debates anymore, it is a certainty. It’s the reason antitrust laws exist and anti-dumping clauses have been included in trade agreements for decades. We just have fallen asleep at the wheel enforcing trade agreements.

  15. @Brian,

    If the government tells the ME3″No, you can’t fly here if you offer prices below X”, could they reply: “Thanks for the suggestion, but no: we will continue to offer prices below X”? Could they?

  16. @Rob,

    My view is still the same. I don’t see any problem with them eliminating competitors and then raising prices. As long as a new player could come into the market at that point, nothing to fear. And we don’t need to go back to Mises to find economists that support that view.

    And Rob, if we are fair, aren’t US and European airlines subsidized?

  17. @Fran, so you are assuming that after the subsidized gulf carriers bankrupt every other airline, some new masochist with several billion dollars in capital is going to decide…hey let’s start an airline!

  18. @Rob,

    Do the ME3 have an unlimited supply of capital to bankrupt everybody? They are already cutting costs, aren’t they?

    Look at what Norwegian or WOW are doing right now across the Atlantic, or what Ryanair and EasyJet did in Europe. It seems to me that it is beneficial for consumers across the board. Flying is more affordable than ever, even in premium cabins. Is that such a bad thing?

    The US3 are doing fine, very, I might say. They don’t need any more help. If anything a little more competition wouldn’t hurt. Singapore or Qantas flying cross country anyone?

  19. @Fran, I know it doesn’t seem that way to you, but you are actually helping make my point. The Ryanair, Norwegian, Wow, and Easyjet examples are all great competition and help ensure competitive pressures continue to keep prices as low as possible. Allowing subsidized competition to swim in the same pool undermines the viability of all of these companies. Emirates flew 51 million passengers in 2015 and received 1 to 1.5B in subsidy. That is $25-30 per ticket sold. You might trust them to be benevolent monopolists once the end game plays out, but history suggests that is misguided.

  20. Don’t know about prices being on the decline but if you don’t fly out of NY, LA or SFO international costs 2x-3x more. CLT where I’m at has like 4 routes to Europe. And since I have to go to SOF that in turn forces me to do 3 flights through JFK usually if I want to pay a normal fare.

  21. Doesn’t the US government occasionally bailing out the airlines companies count as protectionism too?

    “The fact that Americans took their country back from the liberal elites”

    Which Americans? Trump lost the popular vote.

  22. @Aaron EXACTLY! Glad some of the people on here have functioning brains and aren’t all white supremacist #trumptrolls

  23. Ed is goofy. Not sure he’s the best fit for Delta. He was canned when he was not picked for the top job several years ago and there is a reason for that. Hire Glen. He gets it.

  24. In the old days we could grab the Delta FAs in their [private parts] and get away with it. Those days are coming back, yay!

  25. @Aaron – what bailouts are you referring to? The $5 billion Bush gave them to compensate them for the fact that the US Government cost them $5 billion by grounding all flights for days?

  26. @Brian L.

    I never said that the violence was directed towards me. What I am saying is that the US3, Delta particularly, seem to want the government to act on their behalf against the ME3.

  27. @Rob,

    I understand we don’t see eye to eye on this one. To me it is pretty simple: I don’t want the government to favor one player over other: that’s a choice for consumers in my view.

    It’s hard for me to understand what is “fair” trade. Different companies work in different environments with different local regulations, different labor laws, and so on. How do you make something “fair” in your view? Do you prevent every single foreign company to fly to the US unless they pay their employees the same as US carriers do, for example? Do all of them have to have the same interior cleaning schedules, or spend the same in food, etc? Just within the US, isn’t it unfair competition if a lot of your employees live in Georgia versus NY or CA for example? I mean, the list could go on, and on.

    The only thing that supposedly the ME3 are doing is receiving help from their local governments, but if anyone should have a problem with that would be the people from that part of the world who are subsidizing the travel of other people. I guess they feel is an investment plan to diversify their economy, and well, they have to see whether that pays off or not. We don’t have to be concerned if someone wants to pay for a part, or all, of a our travel arrangements. They won’t be able to do it forever, and the money we save, we can use it to finance something else.

    No: I didn’t want to help you make your point. Ryanair is subsidized by local governments all over Europe, and that, in my view is wrong … for the taxpayers who willingly or not subsidize them. It may be good for the consumers who purchase their product but the local governments take capital from the taxpayers to hand it over to a private company. Yes, I understand that they may be trying to bring in more tourism and so on, but, I feel that that should not be their call, let alone the fact that they don’t know if that investment will pay off, and even if it does how fair is that to other sectors of the economy.

    My overall feeling is that, as consumers, we benefit from more players offering more products. Of course I understand certain regulations when it comes to security for example, but that’s not what is at issue here. I can’t help but feeling that the problem with the ME3 is the part of the world they are from (Delta previous CEO clearly said that), because subsidies seem to be a very common thing when it comes to airlines. Most if not all of the European airlines were at some point government funded, and they still receive help as “national” carriers whether their shareholders are “national” or from the Middle East 🙂

    And Rob, no: I am don’t trust the benevolent monopolists: I’m pretty aware that the only thing that will prevent them from abuse is competition, which is exactly what the US3 don’t seem to want, particularly Delta, the one airline that I absolutely do not trust at all. Their disdain for customers combined with their dishonesty, hypocrisy, and shameless behavior speaks for itself. The US3 had an amazing thing in their frequent flyer programs, and they decided that they didn’t need that. Fair enough. Now, they don’t want consumers to pay exactly for the product they want either. Not fair.

    And Rob, they are subsidized too, very much so. See you at Gary’s blog? 🙂

  28. Fran – Since when does government action automatically equal violence? The US3 asking the government to regulate the ME3 does not equal violence, and your use of that word is simply ridiculous.

  29. @Fran. I get what you mean, but it’s important you understand it is not a debate of equally meritorius viewpoints. Government subsidies and the dumping that results from subsidization are universally codified as against the rules. I was not aware RyanAir was subsidized, but if they are then I’m not sure why you would be against subsidies for Ryan Air but defending subsidies for the Gulf carriers. When government intervenes with subsidies, competition breaks down. Read a bit more on background about the “crowding out” effect of government spending and you will better appreciate why subsidies eventually destroy free market operation.

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